In the Spring of 1955 President Eisenhower sent a mission to persuade Chiang Kai-shek to withdraw from Quemoy and Matsu because they were exposed. The President was unsuccessful; Chiang Kai-shek would not withdraw. Subsequently Eisenhower provided the Nationalists with air-to-air missiles that enabled them to sweep Mao's MIGs from the skies over the Taiwan Straits, and sent to Quemoy and Matsu 8-inch howitzers capable of firing nuclear shells. The military situation in the strait began to look more favorable for the Republic of China (ROC) in 1956 and 1957, a result of these improvements in the Nationalist forces due to US military assistance, and of the 1957 agreement between the United States and the Republic of China that placed Matador missiles on Taiwan. These surface-to-surface weapons were capable of carrying conventional or nuclear warheads up to 600 miles. Such developments, when combined with the US reduction of its representation to the US-PRC Geneva talks from ambassador to charge d'affaires in early 1958, may well have led the Chinese to believe that the situation in the strait was menacing.

The renewed threat to the islands came after Beijing had argued that Soviet ICBM developments had changed the world's balance of forces decisively in favor of the Communist bloc, but it came when the reliability of the Soviet deterrent was being questioned within the Chinese defense establishment. At the Moscow Conference of Communist Parties in November 1957, Mao contradicted Khrushchev's line that no one could win a nuclear war. He said that such a war would not be the end of the world, because half its population would survive. From other statements by Mao, it is clear he thought that a large part of the Chinese population would survive an atomic war.

In 1958 the Chinese Communist Party launched the Great Leap Forward, aimed at accomplishing the economic and technical development of the country at a vastly faster pace and with greater results. Militancy on the domestic front was echoed in external policies. The "soft" foreign policy based on the Five Principles of Peaceful Coexistence to which China had subscribed in the mid-1950s gave way to a "hard" line in 1958.

From 23 August through October of 1958, the Communist government resumed a massive artillery bombardment of Quemoy and Matsu, and threatened invasion. Chinese patrol boats blockaded Quemoy and Matsu against Chinese Nationalist resupply efforts This was accompanied by an aggressive propaganda assault on the United States, threats against American naval ships, and a declaration of intent to "liberate" Taiwan. Quemoy, which lies about 10 kilometres from the mainland, had been used by the Nationalists to mount raids on mainland China.

It is clear from recently published Chinese documents that Mao launched the attack on purpose to show his independence of the USSR. Khrushchev's visit to Beijing between 31 July and 3 August 1958 is quite interesting when seen in this context, for the shelling of Quemoy began shortly after Khrushchev left Beijing. Khrushchev's talks with the Chinese leaders were probably designed to alleviate their concern over the USSR's failure to prevent US and British intervention in the Mideast crisis of that summer. If the Chinese discussed with Khrushchev their concern over developments in the strait and their objectives regarding the offshore islands, it is likely that he recommended caution (although in his memoirs Khrushchev states that he was in favor of liquidating the islands in preparation for an attack on Taiwan itself). Not until Beijing signaled its intention to limit the level of military commitment to the strait did the USSR make an unambiguous statement in support of China. In a letter to President Dwight D. Eisenhower, Khrushchev wrote that an American attack on China would be viewed as an attack on the USSR. On 05 October 1958, Khrushchev reiterated this position in an interview with a Tass reporter. It is clear, however, that Khrushchev's "nuclear threat" was to serve as a demonstration of his support for China - not of readiness to fight the United States.

Once the shelling began, the United States made it clear that it would support the ROC in the defense of the islands. Responding to public commitments by the US to defend Quemoy and Matsu, the Eisenhower Administration deployed forces to the region. The American response included a large naval contingent in the Taiwan Straits. The defenders of the islands were supplied by ships escorted by US naval vessels. Senior American officials, including President Eisenhower and Secretary of State John Foster Dulles, publicly affirmed the US commitment to defend Taiwan and to counter naval threats in the Taiwan Straits. Secretary of State John Foster Dulles declared that the U.S. would take "timely and effective action to defend Taiwan".

American naval aircraft also helped the Nationalist air force establish control of the region's airspace. Nationalist pilots flying American-made fighters defeated their Communist opponents in a series of air battles that cast doubt on the quality of Communist's pilots and aircraft. As tension mounted between the United States and China, the US Joint Chiefs of Staff developed plans for nuclear strikes at the Chinese cities of Shanghai, Guangzhou and Nanjing. These plans were consistent with the public statements of Secretary of State John Foster Dulles, who on 12 January 1954 had threatened "massive retaliation" against Communist aggression and expressed willingness to go "to the brink" of war to stop such aggression. The Joint Chiefs of Staff war plans for defense of the islands moved automatically into nuclear strikes on Shanghai and Canton, among other mainland China targets, resulting in millions of non-combatant casualties.

Despite Soviet support of the People's Republic of China's claims to the islands, the bombardment abated, then virtually ceased after President Eisenhower warned that the United States would not retreat "in the face of armed aggression." The unexpectedly forceful American response surprised Chinese and Soviet leaders, and on 06 September 1958 Zhou Enlai proposed a resumption of ambassadorial-level talks with the United States in order to arrange a conclusion to the crisis. The crisis ended on 06 October 1958 when Chinese Minister of National Defense Marshal Peng Dehuai offered to negotiate a peaceful settlement with the nationalists and announced that the PRC would suspend the bombardment for one week. Chinese leaders were careful throughout the crisis to avoid a direct confrontation with US forces. The Chinese, however, continued to declare their ultimate intention to extend their sovereignty over Taiwan and the offshore islands. China deliberately kept the military confrontation at a low level, at no time indicating that the military action directed at the offshore islands was in preparation for an assault on Taiwan. Beijing thereby avoided the risk of a strong American response to its actions and gleaned two messages from this second round in the strait. One message was that the USSR could probably be relied on to deter the United States from an unprovoked attack on the mainland, but not as a nuclear shield for PRC expansion into the Taiwan Strait if that expansion required a conflict with the United States.

The second message was that as long as the PRC relied on the Soviet nuclear umbrella, the USSR would limit Chinese military actions against US interests to those that suited Soviet goals and objectives. Such dependence provided a strong argument that China needed its own independent nuclear forces. The Chinese were criticizing Khrushchev's "peaceful coexistence" policies toward the United States, and the USSR was uncertain about the PRC's future course of action toward Taiwan and the offshore islands occupied by ROC forces, now clearly under the protection of the United States. These disagreements and uncertainties led to the unilateral abrogation by the Soviets of the 15 October 1957 agreement by which the USSR was to supply China with a nuclear bomb and technical assistance in the production of nuclear weapons. After 20 June 1959, the PRC had to continue its strategic weapons program without direct assistance from the USSR.

During three of the presidential debates, held for the first time in 1960, Republican candiate Richard Nixon attacked Democratic candidate John Kennedy for his lack of willingness to defend Quemoy and Matsu. The extensive discussion of the Quemoy-Matsu issue led directly to a controversial dispute between the candidates over policy toward Cuba, where a popular revolution had established a Soviet-supported Communist government. The Kennedy staff, seeking to take the offensive after his supposed soft position on Quemoy and Matsu, put out a provocative statement about strengthening the Cuban fighters for freedom.

In 1974 the United States removed the two squadrons of F-4 Phantoms that were stationed on Taiwan, as well as the U-2 planes and all nuclear weapons which were in. This reduced the US military presence to communications and logistics. The United States stopped providing material military aid to Taiwan in June 1973, though it continued a small program of military sales.